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  • [Industry Forecast ’99] Japanese Firms to Boost Investment in Information Systems, IBM Japan Pres. Says
  • January 5, 1999 (TOKYO) — More managers will focus on investment in information systems as well as system integration and outsourcing in 1999, predicts Kakutaro Kitashiro, president of IBM Japan Ltd.
    Kitashiro explained that companies urgently need to boost the efficiency of their businesses by improving their information systems in the face of the sluggish domestic economy.

    Commenting on the year 2000 compliance issue, he said the issue has to be addressed as the top priority. “Any managers making light of the issue may be proven later to have made a fatal mistake,” he warned.

    Nikkei Business Publications Inc.’s BizTech interviewed Kitashiro on the firm’s achievements in 1998 and the outlook for 1999.

    BizTech: Could you let us know your major achievements in 1998?

    Kitashiro: Our largest achievement last year was to have laid the groundwork for the outsourcing business. We have received a satisfactory level of orders for the outsourcing business from financial institutions and public organizations. It was a year in which sales activities we had been promoting since 1997 finally bore fruit.

    Specifically, we concluded sales agreements with such companies as Daiwa Bank Ltd., Omron Corp., Kao Corp. and Snow Brand Milk Products Co., Ltd. This proves that an increasing number of managers hopes to make their business systems more efficient by improving their information systems.

    Another achievement in 1998 was to make our e-business better known through our private show, IBM Fair ’98. E-business is a concept for an information technology-based business model. We expect that the importance of our business system construction services using hardware, software and networks will grow further.

    Providing technical assistance for the Nagano Olympic Games was also significant. It was a good opportunity for our engineers to gain various experiences because they had to overcome many kinds of troubles ranging from bad weather such as wind and snow to attempts by hackers from all over the world to break our network security system.

    In 1998, we also strengthened ties with our partners. Specifically, we had our approximately 70 partner companies establish a committee to help make our customers more satisfied with our products and services. The committee, whose objective is to investigate how our customers are satisfied, is composed of more than 10 members and observers. I think it is more important eventually to ensure that each partner provides better services than just increase the number of partners.

    BizTech: What are your chief tasks in 1999?

    Kitashiro: Our top priority is to address the year 2000 compliance issue. I would like to let company managers know that any company which neglects the issue might collapse in the future. At the same time, we will continue to beef up our services.

    For example, if a manager thinks that the issue can be simply resolved by his or her system division, that’s all wrong. He or she needs to address the issue with more of a sense of crisis.

    Managers also need to be careful to strictly investigate systems of their business partners in addition to their own ones. It is too late if the systems of their partners stop operating at the turn of the year.

    If such things happen, they may not be able to receive components they ordered and they will have no other way but halt production.

    In anticipation of any troubles caused by the Y2K issue, companies in the United States are moving to secure several months of components beforehand in the latter half of 1999. This move is aimed to keep operating production lines. In addition, we even have a scenario in which this earlier securing of components in the second half of this year will result in a stagnant economy in 2000.

    In the meantime, we will continue to expand our e-business and reinforce the outsourcing business.

    BizTech: Do you plan to launch any new businesses this year?

    Kitashiro: We will launch the Customer Relation Management (CRM) business on a full-scale basis. It will improve a customer center system under which corporations and their customers can build closer relations and an environment for one-to-one marketing. I expect larger needs for this business starting from 1999.

    We plan to provide the service in the form of a comprehensive package system based on a group of system-building tools provided by our venture company, Corepoint Technologies of the United States.

    I would also like to apply ViaVoice, our voice recognition and input system that drew public attention in 1998, to various fields including car navigation systems and games in 1999.

    In 1998, we commercialized jointly with Justsystem Corp. Voice Ichitaro 9, word processing software with which users can input characters via voice. I hope to release other products that adopt voice recognition technology. We will enhance the accuracy of voice recognition technology, improve its operability and promote development of new products.

    BizTech: Do you plan to develop any new products for individual users such as personal computers and information appliances?

    Kitashiro: We will not compel ourselves to market any of the so-called “information appliances for home use.” But personal computers are our strength. I would like to release unique PCs incorporating superior technologies such as a small-sized magnetic disk drive, keyboard, liquid-crystal display and a power-saving feature. I would like to release products that will create their own market and which any other companies cannot follow.

    In the examples of products released in 1998, ViaVoice-equipped Aptiva and the ThinkPad i series using the Aptiva concept are such a group of products.

    I would also like to promote creation of an environment in which users can make use of a PC in any aspect of their daily life. This concept will be realized, for example, by a combination system with a powerful server to be located at home and a convenient, lightweight terminal such as a kiosk terminal and Network Computer (NC) using Pervasive Computing, as well as a wearable computer.

    Related stories:
    ¥ Universally Accessible Non-PC Devices are Vital: IBM Chief
    ¥ IBM Japan Cancels 1999 Year-End Holidays to Cope with Y2K

    (BizTech News Dept.)



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